Coupon distribution is widely used as a method for marketing products. However, the distribution of coupons is not without disadvantages. For example, coupon distribution is logistically complex. Much effort is extended by stores in receiving, verifying, and submitting coupons for reimbursement. As a method of targeted marketing, coupons are also somewhat deficient. Coupons may be exchanged or sold, reducing any targeted marketing aspect of coupon distribution. Coupons are also cumbersome to customers. Gathering, storing, and remembering to take a redeemable coupon to a store are activities with which many customers simply do not have time to engage.
Fraud is also a problem. Store employees sometimes redeem coupons in the absence of the purchase of an associated product, either to allow a friend the benefit of the discount or as a means to obtain cash from their employer.
In addition to these problems, the unauthorized duplication of coupons also limits more widespread use of these coupons for marketing. Further, some systems utilize customer identity to provide incentives to the customer based upon the customer's prior shopping history. Although desirable, these systems incorporate identification systems, which can add cost.